COVID-19: What’s dairy doing?

By Jim Cornall contact

- Last updated on GMT

Retailers in the UK are imposing limits on stocks as stockpiling and panic buying continues, leaving many shelves bare.
Retailers in the UK are imposing limits on stocks as stockpiling and panic buying continues, leaving many shelves bare.

Related tags: coronavirus, COVID-19, Dairy

As the COVID-19 pandemic grows, governments are taking a range of actions to help prevent the spread of the virus.

However, in many countries, panic buying is taking place, leaving shelves empty of what some consider to be essential items.

Toilet rolls, soap, painkillers, pasta, and canned goods are among those in short supply, along with some long-life milk products. This also extends to long-life dairy alternative products, which are also being snapped up in some places.

And while governments try to introduce measures to stop the stockpiling practice, it seems to be continuing in many places.

Governments do have the capacity to introduce legislation to prevent profiteering for both companies and individuals selling items on resale platforms such as ebay.

In the UK, the Competition and Markets Authority (CMA) said it will consider any evidence that companies may have broken competition or consumer protection law, for example, by charging excessive prices or making misleading claims about the efficacy of protective equipment. And it will take direct enforcement action in appropriate cases.

CMA chief executive Andrea Coscelli said, “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.”

Italy has been at the epicenter of the European crisis, and Italian independent brokers of dairy commodities in Europe, L’Interform, told DairyReporter it is making its dairy newsletter available free of charge in an effort to help.

The company said, “Due to the fact that we work in a mayor global dairy trade hub (Italy is the world’s second largest dairy importer and sixth largest dairy exporter), we have experienced the impact of a transition to a full lock-down due to coronavirus first hand and the impact this had on the dairy supply chain (e.g. hoarding followed by plummeting sales, disruption of import/export logistics, farmer’s being asked to deliver less milk, etc.).”

The company added that it realized very few dairy companies, dairy associations and information channels for dairy across the globe have obtained news and experience from Italy, so “we feel it’s important that information is shared and exchanged so dairy farmers and companies in countries transitioning into the lock-down use the available time to prepare.”

The newsletter can be accessed here.

The situation is changing on a daily basis, but some companies related to the industry have issued statements.

Arla Foods

On March 11, the Danish Government announced special measures to limit the spread of COVID-19.

Arla Foods said it is continuing to work to secure business continuity throughout its supply chain as it supports the Danish authorities in their work to contain the spread of the coronavirus.

“The COVID-19 virus has affected the world greatly,”​ Arla said in a statement to DairyReporter.

“At Arla Foods our main priorities are to secure our business continuity and ensure all our employees’ health and safety by taking every step necessary and working closely with local health authorities in the markets we operate in.

“At this time, we are seeing volatile demand flows fluctuating by geographic region and market sector and we are operating at high capacity levels on many lines. We are also in regular contact with government authorities to help secure the right support for our people and industry, and maintain the movement of goods across borders.” 

Valio

Arla has operations in several countries, as does Finnish cooperative Valio. How is it preparing for a possible wider epidemic?

“During the past weeks we have prepared for operating in the exceptional situation caused by the coronavirus,”​ the company said.

“We are continuously monitoring developments in the situation, and we will deploy any needed measures quickly. Valio has a core team leading the assessment of the situation.

“We are carefully monitoring the instructions issued by authorities in all of Valio’s countries, and we are keeping employees up to date on changes in the situation. In Finland, we are closely monitoring the communications and instructions issued by the Finnish Institute for Health and Welfare (THL) and the Ministry for Foreign Affairs.”

On supply issues, Valio said so far, the situation has not had an impact on deliveries, adding that if the situation changes, it will inform customers immediately.

In Finland, Valio has 12 production facilities, three distribution warehouses, and a main warehouse for consumer products. Products for industrial customers are delivered directly from the production facilities. Production and distribution is thus spread across several locations, which facilitates operations in exceptional situations.

Tetra Pak

Packaging company Tetra Pak has also weighed in.

Its president and CEO, Adolfo Orive, said that the COVID-19 outbreak is an unprecedented global event.

“None of us have previously experienced a situation like the one we currently going through. Our thoughts are with those most affected,”​ Orive said.

He said Tetra Pak is taking “extraordinary measures to ensure we deliver on our promise to protect what’s good.”

To do this, he said, there are two priorities: to protect people by keeping people safe, including employees and customers and other partners; and to protect food by ensuring the company helps its customers maintain food supply for communities worldwide.

“We will continue to work with our customers, suppliers, governments and local authorities to achieve these two goals,”​ he said.

“This includes precautionary measures at our own sites and in our operations with customers. It also includes working with local authorities worldwide, to make sure that the global population has uninterrupted access to safe and nutritious food.

“Our global network of manufacturing sites is working together with our suppliers to ensure a continuous supply of Tetra Pak’s complete offering to our customers. We are also co-ordinating with our global logistics partners to ensure continued shipments to our customers in various potential scenarios.”

Oatly

On the dairy alternatives side, Oatly told DairyReporter, “At the moment, our production capacity and supply chain isn’t affected, and we are able to manage the short term increases in demand we’re seeing. So if stocks are low, they will soon be replenished. 

“However, the situation we’re facing with the spread of the novel coronavirus is unpredictable. We’ve got a continuity plan in place to navigate the situation in the best possible way. Our main priority is always the wellbeing of our Oatly community – our staff as well as our consumers.”​

EDA

On Saturday, The European Dairy Association (EDA) alerted the EU Commission and EU Member States about the vital importance of keeping all milk and dairy supply lines open across the Union and across borders.

“The EU Commission – at highest level – reacted on Sunday accordingly and now it is up to the Member States to make sure that milk collection, milk & dairy supply and distribution operations can go on allowing the dairy industry to keep shelves and fridges stocked,”​ EDA president Michel Nalet said.

The EU Commission published its guidelines, including the request that “Member States should preserve the free circulation of all goods. In particular, they should guarantee the supply chain of essential products such as medicines, medical equipment, essential and perishable food products and livestock… Member States should designate priority lanes for freight transport (e.g. via ‘green lanes’) and consider waiving existing weekend bans.”

The EDA said the dairy supply chain across the Union is working ‘full engine’ – and under toughened safety protocols and with some frictions in the supply chain – to be able to guarantee a continued supply of milk and dairy products in these crisis times, across the EU.

It said that, so far, only minor local production sites have been closed down due to a lack of personnel and national border restrictions have only delayed, but not interrupted, supply lines.

“Milk and dairy are essential. We must keep the supply lines open in order to guarantee smooth distribution across the Union. And from an economic point of view, we have asked the EU Commission to support the dairies in building up strategic stocks via the so-called Private Storage Aid Scheme,”​ EDA secretary general Alexander Anton said.

NMPF

In the US, the National Milk Producers Federation president and CEO, Jim Mulhern, said, “US dairy farmers are stewards of a product that’s harvested around the clock, 365 days a year, and they understand the importance of steady production as well as steady consumption.

“The US food-supply chain is more than capable of meeting demand, and consumers should be reassured that milk and dairy products will continue to be produced and available in the coming weeks and months.

“Dairy supplies aren’t experiencing production interruptions at this time, and dairy farmers and processors will continue to do what they do best: produce safe, quality products every day for consumers in the US and worldwide. We will vigilantly work with all aspects of the dairy supply chain to ensure these products get to everyone who needs them and that — as has always been true — dairy will remain something consumers can count on.”

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